CPTPP to help chemical companies to thrive

CPTPP countries account for almost 22% (RM11bil) of Malaysia’s chemical exports in 2019. Major export destinations were Singapore, Japan and Vietnam

KUALA LUMPUR: The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is set to open access and help boost exports for Malaysian chemical players to Canada, Mexico and Peru via better price competitiveness following substantial elimination of tariffs.

At present, Canada imposes a tariff of up to 270%, Mexico 30% and Peru 9%, said the Chemical Industries Council of Malaysia (CICM) in a statement.

It said the high tariffs affect key products exported to CPTPP countries, including organic and inorganic chemicals.

Hence, it calls on the government to expeditiously ratify the CPTPP to enable the Malaysian chemical industry to reap the benefits offered under the agreement.

“Given Malaysia’s small domestic market, an investment strategy is not feasible without favourable access to other export markets.

“CPTPP countries account for almost 22% (RM11bil) of Malaysia’s chemical exports in 2019. Major export destinations were Singapore, Japan and Vietnam,’’ said the association.

With CPTPP, these tariffs will be fully eliminated by the year 2034 across all CPTPP countries.

CICM said CPTPP can also increase investment attractiveness of Malaysia and spur development of local capabilities, especially in specialty chemicals by establishing high standards of protection for investors and further strengthening Malaysia’s competitive advantage.

“Foreign investments into specialty chemicals will also provide domestic producers with knowledge transfer opportunities.

“It will spur development of local capabilities through technical assistance and capacity building programmes by CPTPP partners. This will potentially reduce Malaysia’s trade deficit in the chemical industry,’’ CICM noted. — Bernama